Corruption: Feeling the Heat

It was as if someone had put a match to a leaking gas pipe. With the disclosure of B.C.C.I.'s "black network" around the world came an explosion of new charges and political recriminations that seem likely to go on for months. The question of the hour: Why had so many countries done so little for so long to rein in the Bank of Credit & Commerce International when, as is now evident, so many were aware of the bank's nefarious operations?

In Washington, the U.S. Justice Department adamantly disputed evidence that it had failed to follow through on reports from undercover agents that B.C.C.I. had engaged in corrupt banking practices. In London, British Prime Minister John Major, pale and rigid with rage, told Parliament he knew nothing of rampant fraud at B.C.C.I. until shortly before July 5, when regulators closed the $20 billion rogue bank in most of the 69 countries where it operated. In Peru the scandal breathed new life into charges that former President Alan Garcia Perez had used B.C.C.I. accounts to loot as much as $50 million from the country's treasury.

From Buenos Aires to United Nations headquarters in New York City, the political heat soared amid a new wave of revelations and signs of impending prosecutions of B.C.C.I. Yet, from London to Bangladesh, the bank's depositors, who may have been bilked of $10 billion in deposits, protested B.C.C.I.'s closure as a Western plot to subjugate the Muslim world.

The cloth of chicanery continues to unravel. Among the developments last week: -- Stung by accusations of inertia, the Justice Department said a task force of 10 federal prosecutors was studying B.C.C.I. activities in Washington, Atlanta, Miami and Tampa. Subjects of the investigation will include U.S. politicians and other leaders suspected of receiving millions of dollars from B.C.C.I. in payoffs and bribes. Attorney General Dick Thornburgh, while denying charges of foot dragging, assured a House subcommittee that his & department has "committed all necessary resources to unraveling any violations of the United States federal and criminal laws and pursuing any evidence that exists of those violations." At the same time, the House Banking Committee said it would hold hearings on B.C.C.I. when Congress reconvenes in September.

-- CIA Director William Webster ordered a full-scale review of any agency ties to the bank following reports in TIME and other media that the agency had kept secret accounts at B.C.C.I. to finance covert aid to U.S.-backed insurgents in Nicaragua and Afghanistan. The scandal may further jeopardize President Bush's nomination of Robert Gates to head the CIA. Last week former Customs commissioner William von Raab named Gates, then deputy director of the CIA, as the source of a five- or six-page 1988 agency report on B.C.C.I., which Gates labeled "the bank of crooks and criminals." That raised potentially embarrassing questions about just how much Gates may have known about the rogue bank.